One thing the Australian share market is not short of is dividend shares. But with so many to choose from, it can be hard to decide which ones to buy.
To help narrow things down, I have picked out two highly rated dividend shares. They are as follows:
Australia and New Zealand Banking GrpLtd (ASX: ANZ)
Although the big four banks have rallied strongly from their 2020 lows, it may not be too late to invest.
Especially given the ever-improving outlook for the sector. With the Royal Commission a distant memory, the housing market booming, and responsible lending rules eased, ANZ and the rest of the big four look well-placed for growth in the coming years.
Morgans is positive on ANZ bank and currently has an add rating and $31.00 price target on its shares.
The broker is also forecasting a $1.45 per share dividend in FY 2021 and a $1.61 per share dividend in FY 2022. Based on the current ANZ share price, this represents fully franked yields of 5.1% and 5.6%, respectively.
Charter Hall Social Infrastructure REIT (ASX: CQE)
Another ASX dividend share to consider buying is the Charter Hall Social Infrastructure REIT.
This real estate investment trust has a focus on social infrastructure properties. This means properties such as childcare centres and government buildings, which have specialist use and low substitution risk.
The properties also generally come with ultra-long tenancies and fixed rent reviews. For example, at the end of the first half, the Charter Hall Social Infrastructure REIT had a weighted average lease expiry (WALE) of 14 years and 63.3% of its leases on fixed rent reviews. This gives the company great visibility on its future earnings and distributions.
In respect to the latter, in FY 2021 the company intends to increase its distribution to 15.7 cents per unit. Based on the current Charter Hall Social Infrastructure share price, this represents a 5% yield.
Goldman Sachs is a big fan of the company. Its analysts currently have a conviction buy rating and $3.45 price target on its shares.
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Returns As of 15th February 2021
More reading
- Westpac, ANZ, CBA share prices dip after class action for ‘junk’ insurance
- ANZ Bank’s (ASX:ANZ) profit result could get an extra boost: Macquarie
- NAB (ASX:NAB) chair signals ‘rational’ responses to curb booming housing market
- ‘Worst performer’: ASX bank shuts 146 branches since COVID
- The Westpac (ASX:WBC) share price is the best performing of the big four banks in 2021
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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